Patten v. Smith

• Decision Date: 24 February 1977
• Docket Number: No. 3--1074A179,3--1074A179
• Citation: 172 Ind.App. 300,360 N.E.2d 233
• Parties: Maurice J. PATTEN d/b/a Warsaw Monument Works, Appellant (Defendant below), v. Richard SMITH d/b/a Smith Memorial Company, Appellee (Plaintiff below).
• Court: Indiana Appellate Court

Page 233

360 N.E.2d 233

172 Ind.App. 300

Maurice J. PATTEN d/b/a Warsaw Monument Works, Appellant (Defendant below), v. Richard SMITH d/b/a Smith Memorial Company, Appellee (Plaintiff below).

No. 3--1074A179.

Court of Appeals of Indiana, Third District.

Feb. 24, 1977.

Rehearing Denied April 12, 1977.

Jere L. Humphrey, Chipman, Morrison & Humphrey, Plymouth, for appellant.

Kizer, Neu, Joyce & Rockaway, Peter L. Rockaway, Plymouth, for appellee.

STATON, Presiding Judge.

This is an appeal from a judgment on a verdict awarding to Richard Smith $12,350.00 actual damages and $30,300.00 punitive damages in a defamation suit against Maurice J. Patten in the Marshall Circuit Court, Marshall County, Indiana on May 23, 1974.

The basis of liability for this defamation suit arises out of the mailing of a brochure by Maurice J. Patten entitled 'Never Let This Happen in Your Community'. The mailing was admitted by Patten, and occurred in late 1972, or early 1973.

Richard Smith, a Plymouth resident, caused to be built a 72 crypt, 32 niche mausoleum at Oak Hill Cemetery, a public cemetery in Plymouth, Indiana. The structure itself was completed after the mailing of the brochure.

Mr. Smith began his new venture by attending Plymouth City Council meetings and discussing his project with the Council. Somewhat later, the Council passed an Ordinance which stipulated that the construction of mausoleum was in the best interests of the city. The city, as a part of the overall plan, entered into a lease agreement which placed upon the city the obligations of maintenance and entombment. Additionally, the mausoleum was built on city land with the city paying the expense of paving the road to the mausoleum.

Mr. Smith began his advertising campaign in February, 1972 by running an advertisement in the Plymouth Pilot. The brochure was mailed sometime around the end of 1972 or beginning of 1973 through the Warsaw, Indiana branch office of Mr. Patten d/b/a Warsaw Monument Works. Approximately 1500 or 2000 brochures were mailed to Plymouth residents whose addresses were selected at random from the Plymouth telephone directory.

Mr. Patten obtained the brochure from Mr. John Dianis, executive secretary of Monument Builders of North America, the trade association of monument builders.

The brochure contained a compilation of newspaper articles and photographs of defective mausoleums, together with a cartoon. The cartoon contained both admonitions and advice. The brochure was compiled by Monument Builders of North America with the clippings being obtained through a clipping service. The brochure cautioned the buying public to:

'Look out for the slick salesman who advertises that there has been a demand for a public mausoleum in your community.

1. Who demands it, the community or the promoters?

2. How much profit will the promoters take out of your community?

3. Why buy before the building is completed or before you can see what you are getting?

4. If the building is substantial, why don't the promoters complete it with their own capital instead of yours?

5. Are the crypts double sealed?

6. Have adequate provisions been made for the drainage of moisture and ventilation to remove odors?

7. How much will be set aside for the Perpetual Care Fund and where will the fund be deposited?

8. Will the interest on the Perpetual Care Fund keep the building in repair for eternity?

9. Who will remove the bodies of your loved ones from the mausoleum if it starts to deteriorate and fall apart?

Have your lawyer INVESTIGATE before you INVEST. It may save you money.'

Before the mailing of the brochure, Mr. Smith had been unopposed in the presentation of his project to the community.

The issues presented for review by this appeal are:

(1) Did the trial court err in refusing to give Patten's tendered final instruction number 8?

(2) Did the court err in giving, over Patten's objection, Smith's final instruction number 3?

After reviewing the record in this appeal, we conclude that the trial court erred, and we reverse.

[1-3] The law of libel and slander recognizes two classes of privileged communication, absolute and qualified. Prosser, Law of Torts, 4th Ed. at pp. 776--796. The dissemination of news by the communications media has traditionally been safeguarded by two qualified or conditional privileges which may be pleaded as affirmative defenses in a libel action:

(1) The privilege of 'fair comment' (limited to opinions on public officials and their conduct--not applicable to private individuals or newsworthy events) and

(2) The privilege attached to the reporting of public proceedings.

Prosser, supra, at p. 792. This law of qualified privilege for media expression was brought into the realm of emerging First Amendment doctrine in the landmark case of New York Times Co. v. Sullivan (1964), 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686. The Sullivan Court held that a publisher who discusses public questions is engaged in an activity protected by the First Amendment. 376 U.S. at 282, 84 S.Ct. 727. It further held that the First and Fourteenth Amendments forbade 'a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with 'actual malice'--that is, with knowledge that it was false or with reckless disregard of whether it was false or not.' 376 U.S. at 279--280, 84 S.Ct. at 726. This standard was expanded in subsequent decisions to cover matters of public interest concerning 'public figures.' Curtis Publishing Co. v. Butts (1967), 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094, and finally to include recovery by 'private individuals' involved in matters of public interest. Rosenbloom v. Metromedia, Inc. (1971), 403 U.S. 29, 91 S.Ct. 1811, 29 L.Ed.2d 296.

[4-6] Recently the individual states have been given the option of defining their own standards of constitutional privilege for the defamation of private individuals, as long as they do not impose liability without fault (i.e., libel per se). Gertz v. Robert Welch, Inc. (1974), 418 U.S. 328, 347, 94 S.Ct. 2997, 3010, 41 L.Ed.2d 789, 809. This definitional option may either coincide with the Rosenbloom 'actual malice' standard or with Gertz' 'simple negligence' standard. Damages under the 'simple negligence' standard are limited to actual damages. Presumed or general damages to the reputation of public officials of public figures would continue to be contingent upon proof of 'actual malice' under the New York Times privilege standard. Gertz v. Robert Welch, Inc., supra, 418 U.S. at 349, 94 S.Ct. 3011.

In Aafco Heating & Air Conditioning Co. v. Northwest Publications, Inc. (1974), Ind.App., 321 N.E.2d 580, we rejected the Gertz opinion in favor of upholding the standard enunciated in New York Times and in Rosenbloom. Aafco 'requires the private individual who brings a libel action involving an event of general or public interest to prove that the defamatory falsehood was published with knowledge of its falsity or with reckless disregard of whether it was false.' 321 N.E.2d at 586. This test governs our disposition of the issues discussed below.

I. Reckless Disregard

The trial court adopted and read to the jury the following instruction:

'You are instructed that the mausoleum constructed by the plaintiff Richard Smith at the Oak Hill Cemetery under an ordinance of the City of Plymouth is of public interest and therefore anyone is entitled to make fair comment thereon and such comments are qualifieldy privileged by law. By the term qualifiedly privileged I mean that the plaintiff Richard Smith cannot recover actual or punitive damages unless he proves by evidence of convincing clarity that there was actual malice by the defendant Maurice Patten.' Defendant's Instruction Number 5.

Actual malice was defined by the court as being:

'(W)ith knowledge of its falsity or with reckless disregard as to whether it was false. . . .' Defendant's Final Instruction Number 6.

Patten contends that it was error for the court to refuse to give his instruction defining reckless disregard.

Patten's tendered instruction number 8, which was rejected by the trial court, reads as follows:

'I instruct you that to establish that the defendant, Maurice Patten, or the defendants published the pamphlets with reckless disregard, the plaintiff, Richard Smith, must show by clear and convincing evidence that the defendant, Maurice Patten, in fact entertained serious doubts as to the truth of his publication. If you find from the evidence that Maurice Patten had reason to believe the truth of the matters contained in such pamphlet the fact that he did not verify the truth of the statements contained therein does not constitute reckless disregard.'

This instruction was taken from St. Amant v. Thompson (1968), 390 U.S. 727, 88 S.Ct. 1323, 20 L.Ed.2d 262, whose formulation of the malice test provides trial courts with a relatively clear guidance. The St. Amant Court held that reckless conduct was not measured by whether a reasonably prudent man would have published or would have investigated before publishing; rather, the evidence must show that a reasonable person would entertain serious doubts as to the truth of the statement.

In Aafco Heating, we noted that:

'. . . (P)ublisher knowledge of serious factual inconsistencies--facts which negate or materially contradict the impression conveyed by the published statements to some significant extent--would be highly probative evidence of awareness of probable falsity. The publisher's failure to employ any reliable investigatory methods or lack of any effort to independently verify disputed or questionable factual assertions would also be relevant to the issue of reckless disregard for the falsity of published statements. . . .' (Citations omitted). 321 N.E.2d at 589.

Patten was entitled to have his instruction given on the definition of reckless disregard because it was clearly an issue in the...